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What Volkswagen’s Investment in Argo AI Means for Ford’s Self-Driving Vehicle Business

PHOTO (select to view enlarged photo)
A Ford self-driving test vehicle running in Austin, Texas

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By John Lawler, CEO, Ford Autonomous Vehicles LLC
and Ford Motor Company Vice President, Mobility Partnerships

Last July, Ford and Volkswagen announced a collaboration with Argo AI to introduce autonomous vehicle technology in the U.S. and Europe. As part of this collaboration, Volkswagen would join Ford in investing in Argo AI. Working together with Argo AI positions both Ford and Volkswagen to better serve our future customers while improving cost and capital efficiencies. While the uncertainty of today’s business environment has created challenges for partnerships and investments in the self-driving space, this collaboration remains on track and will be a positive development for everyone involved. As a result, Volkswagen’s investment in Argo AI was finalized June 1.

In my previous role as vice president of Ford corporate strategy, I can tell you firsthand the moment our teams started talking, all three parties could see the value of working together. Here’s what we saw and why we believe it works for everyone involved — including our future customers.

Shared development costs: At Ford, we believe self-driving technology can make people’s lives easier and provide new and more efficient mobility solutions for our congested cities. Building a safe, scalable and trusted self-driving service, however, is no small task. It’s also not a cheap one. We’ve committed to spending more than $4 billion through 2023 on the development of our self-driving service. A large part of this investment is dedicated to developing the self-driving system. With Volkswagen’s investment in Argo AI, we will now share the cost of developing Argo AI’s technology.

Scale and reach: In addition to shared development costs, the deal with Volkswagen makes Argo AI’s self-driving software the first with commercial deployment plans for both Europe and the U.S. Because it can tap into both automakers’ global reach, Argo AI’s platform has the largest geographic deployment potential of any autonomous driving technology to date. Scale and geographic reach are important factors in developing a self-driving system that is robust and cost efficient.

In July 2019, Ford CEO Jim Hackett, Argo AI CEO Bryan Salesky (middle) and Volkswagen CEO Herbert Diess announced a collaboration to develop autonomous vehicle technology. Volkswagen’s investment deal in Argo AI closed on June 1, 2020.

Customer experience: While our companies are sharing Argo AI’s technology development costs, Ford will remain independent and fiercely competitive in building its own self-driving service. Sharing the development costs with Volkswagen doesn’t mean Ford is reducing its overall spend in the autonomous vehicle space. Instead, we are reallocating the money toward our unique customer experience including transportation as a service software development and fleet operations. We believe building the best overall customer experience will help differentiate us from our competitors in the self-driving space.

Investing in and creating the right customer experience is even more important now as the COVID-19 virus has impacted everything — from the way we work to how we shop. At Ford, we believe a change in customer behavior, whether permanent or temporary, is something we must fully understand as we build a self-driving service. Now is the time for us to be thoughtful about the service we are building so it can remain relevant in a changing world and offer customers peace of mind knowing they, or their packages, are in a safe and protected environment inside our vehicles.

We’ve said before, but it bears repeating: There are several important parts to developing a great self-driving service including the self-driving software, vehicle development, fleet operations and the customer experience. To be successful in this space, a company needs to look at every aspect of the business. It’s not about being first. It’s about providing value to our customers, making people’s lives easier and offering cities new and improved mobility solutions.

That’s been our mission from the start. Now, with Volkswagen’s investment in Argo AI complete, we can spend even more time and care ensuring we remain true to our goal.